Anil Agarwal, Founder & Chairman of Vedanta Resources says that government thrust can change the scenario of exploration of natural resources India. Talking about the company, he says they are focused and ready to expand capacity of zinc to 1.5 million tonnes and silver to 1,000 tonnes.
Below is the verbatim transcript of the interview:
Q: Every time when I see you in Rajasthan, there is always a pleasure and you always have something to announce as well. So what is the plan in Rajasthan?
A: I am looking at Rajasthan going forward, as a natural resource, hundreds of new mines to open up, new entrepreneurs to come. I am really enjoying the government policy of auctioning. Only thing is it has to be expedited. Rajasthan has a very tremendous entrepreneurship and if this can be enhanced, if this can be with a self-certification, and I will talk only about my area which I am very passionate about. I have been saying this to eradicate poverty out of the country, to create jobs; we have the better geology than China, than Australia.
As far as exploration is concerned, you will be surprised, in India only 2-2.5 percent exploration happens against close to 10 percent in Australia and other countries. Why not in our countries?
Q: Under-explored, under-invested, not enough international companies that come to India. Do you think with the current government, the ease of doing business and attracting the foreign investment into India, is that really happening now?
A: It has to happen. Like oil production, if you look at, you will be surprised again that the oil is produced only by government, 70 percent, 30 percent produced by us. And whatever asset we have, all the assets was the assets which were depleted assets, there is nothing in it. Cairn, when we have got, there was nothing in it. They felt that there is no oil in it and when we had Hindustan Zinc, similar situation that we have only a couple of years' of reserve. We had Sesa Goa, but this is a great example. It is not that I have done it; many more people can do it. It is about believing.
Whenever the government has entrusted the private people, entrusted the entrepreneur, they have delivered. The time has come; we have an import bill of USD 400-500 billion which is going to be USD 1 trillion. We import 85 percent of our oil, we import 100 percent of our gold, we import all our fertiliser, potash, 100 percent copper we import. It is high time that government should definitely liberalise and it is very important and what is happening, I live in London, and the kind of positioning of this government where there is tremendous hope and everybody, they have not yet started coming, but they all are on the fence, they all want to come.
Mr Modi's aura, 1.3 billion people in the country, it is a tremendous opportunity to go in India. For us, it is high time that we eradicate our poverty, create jobs. And this sector, natural resource sector can create the largest employment and if you look at the agriculture, what we have done, we used to see 20-30 years back we used to import all the grain.
Q: The self-sufficiency is not yet there, but the record production is definitely is something that we have seen in the last few years.
A: Phenomenal. Government has supported on electricity, government has supported on the seeds, government has supported on fertiliser and government is waiving the loan, all these things are happening above ground. It is the time to look at below the ground.
Q: Farm loan waiver is something very important that you touched upon and many analysts or economists are talking about on how the government is really going to fund it. That really seems to be the criteria right now.
A: I only understand, my one focus is that you have so much of wealth below the ground, we do not have to dig so much, we do not have to do so much of work and in a very sustainable manner, we can take out the wealth and whether it is the farm loan -- Rajasthan Government, huge loan they have and I am so sure that the kind of wealth they have below the ground which they are doing it, they have done a lot of auctions and more and more they do, I am pretty confident that this will be the country which will be leading as Punjab is leading. In time to come Rajasthan will lead for developing natural resource also creating phenomenal jobs for their state.
Q: Sustainable mining, responsible mining are some of the other things that you of course, have talked about, but you also have spoken about or you have advocated actually Ministry for Natural Resources development. Where does that idea come from? How do you see that go forward, impact of that, how and why?
A: I love India and I have a great hope on this government because phenomenal things are happening. I have said make it very simple. If you can put all the ministry of natural resource in one ministry umbrella, things will be simpler.
Q: It would work wonders, yes. It would be simpler, faster.
A: Faster, similar approach and also keeping very simple policy like self-certification. Most of the things will be self-certified. We have to be very careful of our environment and we have to show to the world how we protect our environment and for that, whatever norms are required, I really advocate that we should follow. But apart from that everything should be self-certified.
Q: Of course, the slowdown in China is something that has been talked about, done, dusted away with, but the recent statements from China say that they are encouraging their investment firms to actually start investing in commodity derivatives. China of course being the major producer-consumer of many of these commodities wants to start to have a sane price yet all over again. How do you see China taking that stand and what do you think India really needs to take away from that?
A: China has done tremendously well in the last 15-18 years. When we used to go, we used to find them, nothing. And what they have done without resource probably India will do it better. They are looking at it, they want to have their impact into the world, and they want to drive the commodity prices. We are far away from that situation, but we had this hundreds of years back that we used to trade everything what we used to produce. So time to come we will see.
But I will bring one point of oil and gas. Oil and gas, you will be surprised. The first oil was produced in Dibrugarh in the world in Assam and then we still do not produce our oil. 85 percent we import. I am really looking forward to get the best price for our oil. Cairn, we produce, we get a discount of 10-15 percent. We have shown our oil which is premium oil; we should get at least the Brent price. So I always said to the government that leave this pricing thing to the producers. I am not worried about us but I am only looking forward as you mentioned the other company to come. They will come when they will get international price.
Also, I have also mentioned in natural resource, putting the cap. One side I find, I love the way Prime Minister Modi's vision is and when I heard him saying that he is looking forward to have 300 million tonne steel production. We only produce 60-70 million tonnes and this is the best thing to do. So much of small and medium enterprises (SMEs) will come if this production can touch 300 million tonne. And for that, you need iron ore. And today, you will be surprised; we have a cap on the iron ore. It is amazing that these things, the international market, the people look at and this all is happening, but these are the very important thing to take care.
More to follow...
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